1. Evolution of Management
Thought

2. Organization
A structured social system consisting of
groups of individuals working together to
meet some agreed-on objectives

3. Early Practices
Adam Smith
Scottish philosopher
Wrote ‘Causes of
Wealth of Nations’
Proposed ‘Division of
Labour’

4. Job specialization



Adam Smith, 18th century economist, found firms
manufactured pins in two ways:
 Craft -- each worker did all steps.
 Factory -- each worker specialized in one step.
Smith found that the factory method had much higher
productivity.
 Each worker became very skilled at one, specific task.
Breaking down the total job allowed for the division of
labor.

5. Charles Babbage
British Mathematics professor
Wrote ‘On the Economy of
Machinery and Manufactures’
Proposed advantages of
division of labour:
•Reduces the time needed for
learning a job
•Reduces waste of material
•Attainment of high skill levels
•Matching skills and abilities
with jobs

6. Robert Owen
Welsh entrepreneur
Recognised how factory work
was demeaning to employees

7. The Classical Era
Scientific Management- Frederick Taylor
 Develop a science for each element of an
individual’s work
 Scientifically select, train, teach and develop
worker
 Cooperation with workers
 Divide work responsibility equally between
management and workers

8. Gilbreths
 Frank and Lillian Gilbreth refined Taylor’s
methods.
 Made many improvements to time and motion
studies.
 Time and motion studies:
1. Break down each action into
components.
2. Find better ways to perform it.
3. Reorganize each action to be more
efficient.
 Gilbreths also studied fatigue problems, lighting,
heating and other worker issues.

9. Hawthorne studies
- Study conducted in Hawthorne plant of
General Electric Company, Chicago
- Mayo, Roethlisberger, Dickson, Whitehead
 Illumination experiment (1924-27)
 Relay room experiment (1927-28)
 Mass interviewing (1928-30)
 Bank wiring observation (1931-32)

10. Implications of Hawthorne
Experiment
 Social factors in output
 Group Influence
 Conflicts
 Leadership
 Supervision
 Communication

11. Classical Organization Theory
Administrative Theory
 French industrialist Henry Fayol
 Proposed that a manager plans,
organizes, directs, controls and
coordinates
 14 principles of management including
division of labor, authority, scalar chain,
unity of command, initiative

12. Fayol’s 14 principles
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to the general
interest
7. Remuneration

13. Fayol’s 14 principles
8.
Centralization
9.
Scalar chain
10. Order
11. Equity
12. Stability and tenure
13. Initiative
14. Esprit de corps

14. Max Weber
Proposed Structural Theory
Described bureaucratic
structure
• Division of labor
• clearly defined hierarchy,
• detailed rules and
regulations and
• impersonal relationships

15.  Formal rules regulations
 Division of labor
 Hierarchical structure
 Authority structure
 Lifelong commitment

16. Social Man Theory
Mary Parker Follett
Emphasised on
group ethics
Manager must
coordinate group
efforts

17. Chester Barnard
Social Systems Theory
Organisations made up
of people who have
interacting social
relationship
They communicate
Success depends on
maintaining good
relations

18. Herbert Simon
 Described
organisations as a complex network
of decisional process
 Decision process comprises: i) intelligent
activity ii) design activity iii) choice activity
 Bounded rationality
 Administrative man : simplification, satisficing
approach
 Orgaisational Communication

19. Peter Drucker
 Nature
of management as innovative and
creative
 Manager has to act as administrator,
entrepreneur, set objectives etc.
 Organisation structure to facilitate effective
functioning
 MBO

20. Functional Management
Structuring of an organization into
departments or units on the basis of type
of work performed
A functional manager is a person who has
management
authority
over
an
organizational unit - such as a department
- within a business or company

21. Management Styles
 Authoritative
 Participative
 Free-rein
 Pseudo autocratic

22. New forms of organization
 Leaner organizations
 Outsourcing
 Contingent workforce

23.  Virtual corporations
Highly flexible, temporary organizations
formed by a group of companies to exploit
a specific opportunity

24.  Socio-technical
approach
 Management science
 Human relations approach
 Systems approach
 Contingency approach

25. Systems approach
 Considers
relationships inside and outside
the organization.
 The environment consists of forces, conditions,
and influences outside the organization.
 Systems theory considers the impact of
stages:
Input: acquire external resources.
Conversion: inputs are processed into goods and
services.
Output: finished goods are released into the
environment.

26. Systems approach
 An
open system interacts with the
environment. A closed system is
self-contained.

27. Management Science

Uses rigorous quantitative techniques to
maximize resources.
Quantitative management: utilizes linear
programming, modeling, simulation systems.
Operations management: techniques to analyze all
aspects of the production system.
Total Quality Management (TQM): focuses on
improved quality.
Management Information Systems (MIS):
provides information about the organization.

28. Contingency Theory
 Assumes
manage
there is no one best way to
 The environment impacts
the organization and
managers must be flexible to react to
environmental changes.
 The way the organization is designed, control
systems selected, depend on the environment.
 Technological
environments change rapidly,
so must managers.